Market Turnover


Exchange’s Disciplinary Action against China Saite Group Company Limited (Delisted, Previous Stock Code: 153) and Ten Directors

24 Aug 2023

(A wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited)


The Stock Exchange of Hong Kong Limited 

(1) China Saite Group Company Limited (delisted, previous stock code: 153);

(2) Mr Jiang Jian Qiang, former executive director and Chairman;
(3) Mr Shao Xiao Qiang, former executive director and CEO;
(4) Mr Xu Fang Hua, executive director (as at the date of delisting);
(5) Mr Xu Jia Ming, independent non-executive director (as at the date of delisting);
(6) Mr Wu Zhong Xian, former independent non-executive director;

(7) Mr Hua Gang, executive director (as at the date of delisting);
(8) Mr Liu Zhi Bo, executive director (as at the date of delisting);
(9) Mr Yan Hua Lin, independent non-executive director (as at the date of delisting);
(10) Mr Luk Chi Shing, former independent non-executive director;

(11) Mr Eddie Hurip, former independent non-executive director;

each of Mr Hua, Mr Liu, Mr Yan, Mr Luk and Mr Hurip to attend training.

The statements made in respect of Mr Jiang, Mr Shao, Mr Xu Fang Hua, Mr Xu Jia Ming and Mr Wu are made in addition to a public censure against them. The Prejudice to Investors’ Interests Statement is a statement that, in the Exchange’s opinion, the retention of office by these directors is or would have been prejudicial to the interests of investors.


Between 2014 and 2019, Mr Jiang caused the Company to provide him with financial assistance through a series of loans and advances amounting to nearly RMB150 million. He did not disclose these transactions to the board, although Mr Shao was complicit in approving them. The loans and advances were for Mr Jiang’s personal benefit and against the Company’s commercial interest, as well as being forbidden under the Company’s Articles of Association.

There have been multiple failures by the Company to provide timely and accurate information to the Exchange and/or the investing public:

  • The loans and advances were connected transactions and should have been disclosed, but were not.
  • During the course of the Exchange’s investigation, the Company provided false and misleading information regarding the loans and advances.
  • In March 2020, the Company’s auditor discovered the loans and also other transactions that were not recorded in the Company’s accounting records. Civil proceedings were taking place against the Group in respect of some of these transactions. The auditor raised its concerns as material audit issues. However, under Mr Jiang’s direction, the Company withheld information about these audit issues and concerns from the Exchange and the investing public.
  • The Company failed to make timely announcements of a subscription of shares in a listing applicant in April 2019.
  • The Company failed to make timely announcements in respect of fourteen winding up petitions presented against it between April 2019 and July 2020.

Mr Jiang was either significantly involved or the decision-maker in each of these failures.

Despite Mr Jiang’s questionable conduct, evident conflict of interest, and the significance of the issues, the other directors did not raise enquiries or take follow-up actions to procure the Company’s Listing Rule compliance, even when the events were brought to their attention.

For example, in March 2020, the other directors on the board at that time were all aware of the concerns leading to the audit issues, and that information about them was being withheld, but did not object or even question Mr Jiang’s decision to withhold disclosure. The independent non-executive directors in particular failed to apply their independent judgement.

Furthermore, all of the directors failed to discharge their duties to ensure the Company had adequate and effective internal controls. There were material deficiencies in fundamental areas, such as controls relating to connected transactions, contract approval and payment authorisation.  The failures of the directors with specific responsibilities for internal controls, including the Compliance Committee members and/or independent non-executive directors were particularly serious.


Key messages:

Directors of listed companies must not treat the companies’ assets as their own, or place their own interest above that of the company.

Directors must ensure the provision of accurate and complete information in a timely manner to the investing public and the Exchange.

Independent non-executive directors, although not involved in day-to-day operations and management, have a key role to play in Listing Rule compliance and corporate governance. Serious failures to discharge their duties may lead to imposition of severe reputational sanctions on them.

A copy of the Statement of Disciplinary Action can be found on the HKEX website.